How do I find the best car insurance company?

Do you wonder how to find the best car insurance company? It’s a good question. It will come as no surprise that TV advertising budgets for insurance companies are often more than a billion dollars per year, and growing. Interestingly, the companies mostly advertise saying they have the best price. With all these companies focused on price, is anyone thinking about quality and value?

We have good news. There are insurance companies that focus on quality and value. However, they typically don’t advertise. Therefore, there’s a good chance you’ve never heard of these companies. Do you want to know who the best car insurance companies are in your state? The ValChoice website lists the best car insurance companies in each state.

What determines the best car insurance companies?

High quality data is necessary to properly analyze insurance companies. State Departments of Insurance (DoI’s) collect the highest quality data. Using the high-quality DoI data makes thorough, accurate analysis possible.

The only known data analytics company analyzing the DoI data currently is ValChoice. Both consumers and insurance agents use the analysis to guide important decisions about insurance. Proving performance requires a few years of continuous operation. And, those years of continuous operation must be above a minimum business threshold. The factors included in the analysis are as follows:

Value – This analysis measures of the amount of insurance premium collected that is paid out to settle claims.
Claims Handling – For claims handling the analysis includes four important elements:

The claims adjusters performance
The frequency with which claims payments are unreasonably delayed
Outright claim denials that are unfair or unjust
The frequency of the claims offer being unsufficient (too small)

Service – The service grade measures performance on over 100 categories of interaction between consumers and insurance companies. Additionally, this analysis considers interaction between consumers and the agent of the insurance company.

Four ways to know: “Is my insurer one of the best car insurance companies?”

1) Don’t Ask a Friend

Most people rarely file insurance claims. Therein lies the problem. How can someone who has had little interaction with their insurance company know how good that company is when paying claims? We buy insurance to pay claims. Especially large claims. But most people don’t file large claims. Some don’t file claims at all. Therefore, asking people is meaningless because it’s not a large enough sample size of relevant data.

2) Use Reliable Data Analysis Firms

Drivers often times don’t understand their insurance policy. Therefore, complaints about insurance are often not justified. DoI’s report that approximately 85% of complaints about insurance companies are invalid. Therefore, rating systems that do not have a rigorous vetting of input may be based on 85% bad data. Unquestionably, analysis based on 85% bad data yields unreliable results.

3) Demand Thorough Data Analysis

Accurate analysis necessitates analyzing every company in the industry. Analyzing less than 100% of companies skews the results. Excluding companies tends to shift ratings, of companies rated, upward. The reason there’s often a shift upward is it’s typically the smaller, higher performing companies that are excluded. Use a school classroom as an analogy. Class grading will be done on a curve. A students will get an A, but will be excluded from the curve used to evaluate other students. Excluding the A students shifts everybody else up to better grades. This creates grade inflation. The same applies to analyzing insurance companies.

4) Ignore Advertisements

Insurance companies can create a positive perception based on advertisements. This is possible in part because the interaction between consumers and insurers is infrequent. Unfortunately, these big budget reputations paid for with premium dollars from current customers last a long time. For big insurers, this is great news. However, for consumers this is bad news.

For a rating on your insurance company, get a free car insurance rating.

How do I find the best car insurance companies?

Another way to find the best car insurance companies is through agents. In particular, independent agents. Since independent agents represent multiple companies, they will often know which companies are best. However, that’s not universally true. Therefore, to make sure consumers can find agents that represent the best companies, ValChoice created a directory of agents that represent the best car insurance companies. Insurance agents meeting the following criteria are eligible to be listed on ValChoice.com:

Agents must represent companies that score equal to or higher than the gauge shown below. Hence, they represent the best car insurance companies.
These agents must be willing to provide ValChoice ratings, for free, on any insurance company.

The ValChoice fuel-gauge-style image below depicts a score of 68. Why is 68 important? 68 is the minimum score required in order to be recognized by ValChoice as one of the best car insurance companies.  As described above, insurance agents listed in the ValChoice agent directory represent at least one company scoring 68 or higher. Requiring agents to represent the best quality insurance companies assures consumers they can shop for quality insurance with these agents.

Find insurance agents representing the best car insurance companies on ValChoice.com on the find insurance agents pages. Every agent listed on these web pages represents companies that score 68 or greater and have excellent claims handling.

About Dan Karr

Dan has been a CEO or Vice President for high-technology companies for over 20 years. While working as a Senior Vice President of Marketing and Sales for a technology company, Dan was seriously injured while commuting to work. After dealing with trying to get insurance companies to pay his significant medical bills, or to settle a claim so Dan could pay the medical bills, he became intimately aware of the complexity of insurance claims. Dan founded ValChoice to pay forward his experience by bringing consumers, insurance agents and financial advisors easy-to-understand analysis needed to know which insurance companies provide the best price, protection — claims handling — and service.